With some Republican lawmakers from Texas taking opposite sides, a clause that could have revived sales of Texas rice to Cuba was abruptly removed from a spending bill Tuesday.

President Bush, whose administration is steadfastly opposed to expanding trade with the communist country and dictator Fidel Castro, had threatened to veto the measure if House and Senate negotiators let the clause remain.

U.S. Rep. Ted Poe, R-Humble, whose district includes most of the 41,500 acres of rice farms in Southeast Texas, said the removal of the provision was a mistake: "It doesn't punish the communists in Cuba, it punishes the rice farmers in Texas."

"It's devastating," said Ray Stoesser, a third-generation rice farmer who has 3,000 acres of the crop in Liberty County and is president of the Texas Rice Council. "We need that Cuban market and we need it bad.

"It was the second-best export market for rice behind Mexico in 2004, and we were growing," he said. "It's silly for us to be so close to people who want our rice, and our government won't let us sell to them."

DeLay, Cornyn opposed
Bush, Sugar Land Republican Rep. Tom DeLay and Sen. John Cornyn, R-Texas, said easing pressure on the Cuban government essentially lends support to Castro.

At issue is a 5-year-old rule signed by President Clinton that exempted food and medicine from the long-standing trade embargo with Cuba.

In the original interpretation of the regulation, Cuba could use a letter of credit from a foreign bank to purchase U.S. goods and take ownership of them after they entered Cuban territory.

The foreign bank would then transfer the payment to the U.S. exporter.

Competitive edge lost

But after questions from some banks, the Treasury Department's Office of Foreign Assets Control decided in February, under a more literal interpretation, to require all Cuban payments before any goods could be shipped to the island.

The process requires more time and money, with the result that "U.S. products are not as competitive as they were," said Parr Rosson, an extension economist and director of the Center for North American Studies at Texas A&M University.

The change meant that American policies toward trade with Cuba are more restrictive than the regulations on trade with Iraq and Iran.

This year, rice exports to Cuba are down 45 percent to $35 million, and total exports have fallen about 17 percent to $253 million, Rosson said.

Several lawmakers from Texas, as well as agriculture groups and other farm-state politicians, lobbied to reverse the rule change.

The House and Senate included wording in the Transportation and Treasury departments' 2006 appropriations bill to withhold money from the Foreign Assets Control office to prevent it from enforcing the rule.